Yellow metal loses safe haven sentiment
Bullion metal prices ended substantially lower on Friday, 12 April 2013. Prices dropped to their lowest levels in almost twenty-one months. Recent cuts to gold-price forecasts continued to hurt sentiment, prompting investors to lose confidence in gold as a safe-haven investment. Prices dropped despite a weak dollar.
Gold for June delivery ended lower by $63.5 or 4.1% at $1,501.4 an ounce on the Comex division of the New York Mercantile Exchange on Friday. It fell to a low of $1,491.4 during intra day trading. Prices had shed 4.7% for the week.
May silver ended lower by $1.37 cents (4.9%) at $26.33 an ounce on Friday. Prices had lost 3.3% for the week.
There were euro zone concerns creeping out of Cyprus again on Friday. According to reports, eurozone finance ministers approved a 10 billion euro bailout for Cyprus on Friday. The report said in order for Cyprus to meet its financing needs over three years, the country will need to find 13 billion euros by itself, likely coming from the closure of its Laiki bank and the restructuring of the Bank of Cyprus.
In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, fell by 0.4%.
At Wall Street, Friday's economic data showed March retail sales declined 0.4%, while the market had expected an unchanged reading. The prior month's reading pointed to an increase of 1.0%. Excluding autos, retail sales declined 0.4%, which was lower than the expected unchanged reading.
The preliminary University of Michigan Survey for April came in at 72.3, which was lower than the 78.6 that was posted in the prior month, and worse than the reading of 78.0 that had been expected by the consensus. Also, March producer prices declined 0.6%, which was cooler than the downtick of 0.1% forecast by the consensus. Core producer prices rose 0.2%, while the consensus expected an uptick of 0.1%.
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